The Trump election “bitcoin bubble” has turned into a major crash with the price of the cryptocurrency falling heavily on economic fears. The value of the world’s biggest cryptocurrency slumped dramatically in panicked overnight trading and is now down around 6% over the last day.
This morning bitcoin was trading at just below £90,000, its lowest level since November, having peaked at around $105,000 at the time of President Trump’s inauguration last month. Other crypto currencies fell even more with Ethereum – the second largest digital currency – down 10 % over the past 24 hours. Dogecoin, the currency most closely linked to Trump adviser Elon Musk was also down around 10%.
The total market capitalization of all crypto has fallen by 8%, from over $3.31 trillion to about $3.09 trillion. The huge sell-off raised fears of a new “crypto-winter” to match the long slump in 2022 and 2023 when bitcoin was trading at little more than $20,000.
The sell-off coincided with another big drop in share prices in the US tech sector. The Nasdaq Composite dropped over 1%, over concerns about artificial intelligence demand and upcoming earnings from chipmaker Nvidia. The markets have also been spooked by fears that inflation will stay higher for longer slowing down economic growth in America. Uncertainty over potential tariff wars with Canada and Mexico have also added to concerns.
Augustine Fan, head of analysis at SignalPlus,said that “the sentiment of economic slowdown dominates the markets, with strengthened correlations between stocks, bonds, and cryptos. This explains why we are observing this synchronized correction across all assets.”.
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